Winners and losers

The manner in which the Sasan ultra mega power project was finally awarded to Reliance Energy Ltd (REL) does nothing to assuage concerns about uncertainty in the country’s infrastructure investment climate. It’s also quite curious why it took the government seven months —since Lanco won the bid at the same price as REL gets it now—to finally figure out that the former’s consortium won’t meet bid guidelines.

The protracted confusion, clearly coloured in political hues, has only affirmed that non-transparency is alive and well.

It is equally curious why the country’s largest power producer, NTPC Ltd, did not make a meaningful attempt at rebidding. Perhaps because it would have had to bid lower than REL’s first quote and the central regulator could have then questioned the higher capital costs NTPC shows for its current thermal capacity.

Or did political forces impede the state-owned player’s competing ability, too?